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Mortgage seekers are asking family and friends to look after their children to reduce their outgoings while applying for a loan, a survey has suggested.

Childcare is among the costs considered by mortgage providers when deciding whether an applicant should be given a home loan.

Some families are temporarily cutting this cost, while others find they are offered a smaller loan, Uswitch claims.

The price comparison site said one in six had been rejected or given less.

It asked 1,000 parents with children aged 12 and under who had applied for a mortgage in the last 10 years in a survey.

‘Worrying’

Of those asked, 17% said that they had been turned down for a mortgage or offered a smaller loan than they expected owing to the cost of childcare.

Tashema Jackson, from Uswitch, said: “It is worrying that many feel under pressure to conceal these costs during the mortgage application process, as this may have a severe impact on their ability to meet repayments in future.”

The Council of Mortgage Lenders (CML), which represents banks, building societies and other lenders, said: “Lenders must take into account all the key financial commitments of borrowers. That could mean that those who have to pay for childcare may not be able to borrow as much as others with a similar income who do not have these commitments.

“The aim is to try to ensure that every mortgage is affordable, taking into account the circumstances of the borrower.”

Latest figures from the CML show that the appetite among mortgage applicants is undimmed and stronger than a year ago.

First-time buyers borrowed £5.1bn in August, up 13% on July and a 24% increase on August last year. This equated to 31,800 loans.

The average first-time buyer was aged 30, they typically borrowed £136,300 and, on average, gave a deposit of 15%.

Home movers were advanced 34,200 loans, borrowing £7.1bn, which was up 15% on July and a 3% increase compared to a year ago.

A cut in interest rates by the Bank of England to a new historic low of 0.25% will keep demand high, according to Paul Smee, director general of the CML.

“Mortgage rates remain at or close to historic lows, and the re-pricing of mortgages following August’s base rate cut should help to underpin a continuing, strong appetite for home-ownership over the coming months,” he said.

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